The Financial Services Commission (FSC) of South Korea is set to tighten oversight on the cryptocurrency industry by mandating that executives of such companies undergo a regulatory approval process. According to the FSC’s February 5th announcement, significant amendments to the rules governing crypto asset service providers are being proposed. These changes would grant the FSC the power to vet new executives before they assume their roles at digital asset firms. Prior to this enactment, all cryptocurrency businesses will be required to notify the FSC about any changes in their management.
Regulatory Approval Prior to Appointment
These new regulations stipulate that executives cannot begin their tenure at a crypto firm until the FSC endorses the report detailing the change. It is anticipated that these amendments will be operational by the end of March 2024, subject to a series of administrative steps including review and final approval by the FSC.
In addition, the renewal process for crypto companies’ licenses will be affected by these amendments, with the FSC holding the authority to halt the review of any applications should there be ongoing investigations into their personnel by local or global authorities.
Moreover, South Korea’s regulatory body is actively seeking input from the public regarding these proposed measures, setting a deadline of March 4th for any feedback.
Broader Regulatory Moves in South Korea
In the broader scope, South Korean regulators are working towards implementing more stringent measures within the country’s crypto market. This includes new legislative endeavors to regulate crypto mixers, a measure aimed at curbing money laundering activities associated with these services. With growing concern over illicit financial activities, the FSC is also considering a ban on purchasing cryptocurrencies with credit cards to prevent money outflows and laundering risks. The trend indicates ongoing and future intensification of regulatory practices in South Korea’s crypto space.